Malaysian Prime Minister Abdullah Ahmad Badawi today launched the country's first fleet of cars using palm biofuel in a bid to promote alternative fuels and reduce dependence on petroleum.

"Envo Diesel" biofuel, a brand name coined to appeal to Malaysians, consists of five percent palm oil and 95 percent diesel, and Abdullah hailed its inaugural use by government cars as a major development for the country.

"I hope this move will bring about a huge change in the use of fuels nationwide," Abdullah said in a speech.

"I hope this will also spur a change in the mindset of society on the potential of the country's palm oil industry," he said.

Abdullah then pumped Envo Diesel into an army truck at the launch, which saw the government departments signing memoranda on their participation.

The first cars off the rank are from the defence and plantation and commodities ministries, the works department and Kuala Lumpur's city hall in what officials said was a voluntary test for the widespread use of the biofuel.

Hundreds of government vehicles are expected to use Envo Diesel before it eventually becomes compulsory in the country, officials said.

The government has hailed biofuel as an environmentally-friendly alternative to petroleum-based fuels, although conservationists have criticised oil palm plantations for permanently destroying wildlife habitats.

"We hope that the alternative fuel will not only be better in terms of quality, but price-wise it will be cheaper too," Abdullah told reporters after the launch.

He said the biofuel would be available nationwide for commercial use by 2007.

Global leader

Malaysia has already begun preparations to change from diesel to biofuels by 2008, including drafting legislation that will make the switch mandatory.

Malaysia is the world's largest producer of crude palm oil but also aims to be the global leader in biodiesel production, with aggressive expansion in its palm oil production.

The country launched the first commercial biodiesel plant in the country and the region in January. The government, keen to reduce dependence on fossil fuel, is building three biodiesel plants.

Strong demand for biodiesel from Europe as well as Colombia, India, South Korea and Turkey is fuelling the growth of the industry in Malaysia, as more countries seek to reduce their reliance on oil amid high prices.

Last year, Malaysia produced 14.96 million tonnes of crude palm oil which raked in some RM28.6 billion (US$7.73 billion) in export earnings for the industry.